For retirees who are still paying off large loans (think failed business ventures or real estate deals), a guaranteed level-premium term life policy is ideal, said Scott Simmonds, a fee-only insurance consultant in Saco, Maine.
But the key is not to overinsure. To minimize premium costs, he suggests considering a term life policy that expires when your payments are scheduled to end and to obtain just enough coverage to extinguish that debt.
"Life insurance in retirement might make sense if you have a fair amount of debt that you don't want to burden your family with," Simmonds said.
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Term life may also make sense if you continue to work during retirement, even part-time, to supplement your savings and wish to protect your spouse from the loss of your income when you die, he said.
It all depends on how much you earn and how much your savings falls short of your income needs. Generally speaking, though, you should cancel your policy immediately if your spouse—for whom the policy was intended to provide a financial cushion—dies before you, he said.